In May 1999, the then Minister of Transport introduced the results of the Moving South Africa Project. It found that the taxi vehicle fleet was dangerously old, posing threats to both economic stability and to safety. He announced that he was forming a task team and would put to Cabinet proposals for the 'recapitalisation' of the taxi fleet.

More than five years later nothing has happened :

The fleet has collectively grown five years older and that much more dangerous.

All concerned agree that it is now time for action:

In this short paper SANTACO describes its concerns and proposes solutions. When we express our concerns in this way we are sometimes accused of being negative. That is not so. There are real and deep flaws in what is currently being proposed. We have a duty not only to our members, but also to the government, the commuters and the public at large, to point out these flaws. If they are not addressed and corrected, they will prevent the project being successful.

We do have solutions, though, solutions that we have time and again put to government in writing or by presentation (see list attached). Regrettably, we have found it very difficult to get these even considered by government, let alone accepted. We present them in this paper. If they are accepted they will allow rapid movement towards the renewal of the taxi fleet, and enable a win-win situation for all stakeholders to be achieved in an affordable manner.

The recapitalisation debate has developed two distinct parts :

The EMS is by far the easier to deal with, and so we relegate it to the final part of the paper.

Our main concerns lie in the field of the new vehicle.

We ask three fundamental questions:

The fundamental reason for concern is that government is trying to make too big a jump in one go. It is aiming to move from the developing-world microbus to the developed-world sophisticated bus.

We think the answer lies in a halfway house which will offer distinct improvements in safety and comfort, but in a form which is acceptable to those who have to make the change, and affordable to those who have to fund it.

(We also recall the saying about a camel being 'a horse designed by a committee'. The present proposals have very much that look about them.)

These are some of the major concerns.

This is the major area of concern. There are a number of elements which contribute to it. We have not been party to the BAFO process, and so we cannot know in detail what price the respective bidders have put forward. We can, however, make an informed guess. It is probable that the items described below have added substantially to the purchase price.

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In general, and with due respect to all concerned, we suggest that if the matter of the NTV were not so serious, some of the proposals in the specifications would be regarded as laughable.

There seems to be complete confusion over what is called the 'scrapping allowance'. The matter does not seem to have been thought through in any depth.

Two quite separate forms of payment are required :

Government may protest that this compensation model would place too great a burden on public funds. That argument does not affect the logic of what we have proposed. It does, though, make it even more important that the purchase price of the NTV be kept to the minimum consistent with the requirements for safety and comfort.

In the five years since the recapitalisation scheme was announced, operators have continued to buy new combis. The effect of this has been to reduce the size of the potential market. This in turn will affect the purchase price, since the overhead costs of production will need to be spread over a smaller number of units.

We do not think that this aspect has been given the attention it deserves.

There are two possible avenues.

Government and SANTACO can either :

If :

then it might be possible to complete the present process with minimal delay.

We are bound to say, though, that in our experience the process would yet again become bogged down in negotiations and horse-trading.

We recommend that the present process be regarded as Phase II of recapitalisation. This would see the introduction at a future stage of a sophisticated vehicle, ideally after a period in which government has implemented its plans for changes in the way in which taxi services operate.

In the meantime there is a desperate and urgent need for a speedy recapitalisation of the taxi fleet.

We believe that we can come with new ideas which can be quickly implemented, and which will :

SANTACO would welcome a meeting with the Minister and inter-departmental committee to discuss these two options in detail.

We recognise that with either option there may be legal implications in respect of commitments entered into between government and the short-listed bidders. It would therefore be helpful if the Department's representatives were present at the meeting.

In retrospect, we can see that the EMS has been an unnecessary complication in the whole recapitalisation saga. It may be that we have unintentionally been the cause of that.

Soon after it was elected in September 2001, the SANTACO National Executive Committee recognised the need for an electronic management system for the taxi industry. It would assist in cash control, and would provide management information for operational purposes.

At one stage it seemed that the EMS could be supplied as part of the new vehicle. We therefore introduced the concept to the recapitalisation steering committee. Regrettably, this meant that EMS became embroiled in the much larger issue of the NTV.

We have accordingly continued to develop our EMS proposals quite separately from those of the NTV. We now have a suitable package, which we are ready to launch.

We should point out, with respect, that the SANTACO EMS has nothing to do with government. It is a private initiative developed together with the private sector.

(Government sources in the recapitalisation project have sometimes suggested that EMS will be necessary in order for the banks to be willing to offer finance for the NTV. That is not so. We have agreed a vehicle financing deal with one of the three largest finance houses in the country. Letters of understanding have been exchanged. The agreement does not mention the EMS.)

We recognise that government is keen to see a system which is inter-operable with the bus and rail modes. We support that wish, and will do all we can to ensure that our system is compatible with those of the other modes.

However, we know from our experience with the NTV that the development and implementation of a fully compatible inter-modal system will take many years. That is not being pessimistic, merely realistic.

We therefore intend to introduce our taxi industry EMS in the very near future. As with the NTV, we are sure that this will be merely the first stage in what will ultimately become a more sophisticated system as part of the integrated transport system envisaged by government.

At the moment, EMS is linked in the public mind with the NTV. We want to 'de-link' the two. For the reasons among others, we would welcome the participation of government in the launch. The Minister may be willing to announce that government is handing back to SANTACO the responsibility for the system.

The launch is tentatively scheduled for early September. We would be very willing to fix the date so that it meets the Minister's diary.

We are pleased to have had the opportunity to present this paper to the National Assembly Portfolio Committee on Transport.

SANTACO reaffirms its commitment to the recapitalisation of the taxi fleet at the earliest possible opportunity. We think that this can best be done by lowering our collective sights, and introducing an advanced but robust vehicle suitable for the taxi industry (and the taxi commuter) of 2004.